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Area firms violate Minnesota wage and overtime laws

MOORHEAD – Area firms underpaid 78 workers almost $118,000 for several Moorhead college and university projects going back to 2011, Minnesota Department of Labor and Industry documents show.

The violations of the state’s wage and overtime laws are a sign that higher standards should be required of contractors to ensure fair pay and competition, said the leader of the Fair Contracting Foundation.

One firm, FM Contracting of West Fargo, shelled out nearly $69,000 in back wages for failing to pay the prevailing Clay County wage for carpenters during its work on Minnesota State University Moorhead’s Dahl Hall, said Mike Wilde, the executive director of FCF.

FM Contracting’s errors were not the result of any shenanigans by the firm, Wilde said.

But the discovery sparked a wider investigation of state projects by the Department of Labor and Industry that found a number of violations of the state’s wage laws.

With $850 million or more in capital projects expected to be approved in this year’s state bonding bill, Wilde and Minnesota 2020 spokesman Joe Sheeran said labor groups and conscientious contractors want to ensure competition is fair and wages aren’t undermined.

“These are laws meant to strengthen or protect the local economy,” Wilde said. “If you’re transporting Bismarck or Fargo or Jamestown workers to work on a Moorhead job, you have to pay a Moorhead wage rate.”

Investigations spike

The number of investigations by the Department of Labor and Industry rose sharply in recent years.

Jan Mahoney, MSUM’s vice president for finance and administration, said the school has a project manager, but it also relies on oversight by the architects and the Minnesota State Colleges and Universities system.

Violations are typically worked out between the contractors and state officials, she said.

Mahoney said the biggest challenge may be that the Department of Labor and Industry doesn’t have a set schedule to update wage rates, making it tough for contractors to be sure that they’re following current rules.

“We take prevailing wage very seriously. We try to abide. But there will be times when there will be an oversight,” Mahoney said.

More wage issues

Other area projects have had wage issues, too, Wilde and Sheeran said.

• A complaint last year by FCF led to an investigation that found five contractors on a University of Minnesota Crookston dormitory project had underpaid workers more than $30,000.

By mid-November, $27,425.28 had been recovered, Wilde said.

• Air Mechanical of West Fargo paid more than $80,600 to workers after the U.S. Department of Labor determined the firm has not paid prevailing wages, benefits and overtime to employees building Lake Park-Audubon High School.

The Fair Contracting Foundation, based in St. Paul, was started by the state’s Building and Construction Trades Council.

Wilde said the group also counts on support from some of the state’s contractors.

Minnesota 2020 is a progressive think tank that focuses on education, health care, transportation, clean energy and economic development issues.